Yardi Systems, another U.S. property management company, is also facing a class action lawsuit alleging antitrust violations for artificially inflating rent prices. The company said it “nothing illegal” because it does not impose rental prices through its software or engage in “pricing collusion.”
According to Zillow, typical rent costs in Phoenix have increased by more than $500 per month from April 2020 to 2024, and in Washington, D.C., by about $400 during the same period.
Tenants have also filed numerous class action lawsuits against RealPage and the owners of the properties that were consolidated. Some of the owners named in those settled in claims earlier this year. The court dismissed a lawsuit over price fixing of student housing, but found that a class action lawsuit filed by tenants can move forward. Attorneys representing some of the plaintiffs in the class action did not respond to requests for comment.
RealPage laid off about 4 percent of its employees in June. “RealPage is hyper-focused on innovation and accelerating growth for its business in 2024 and beyond, and as a result, has made the decision to eliminate a small number of positions across the company,” said Jennifer Bowcock, a spokeswoman for the company. The layoffs were not related to the antitrust lawsuit, she said. Thoma Bravo, RealPage’s owner, did not respond to a request for comment for this story.
From 2020 RealPage he said collected data on approximately 16 million rental units across the United States. There are 44 million renter households in the U.S., and nearly 22 million rental units are owned by for-profit companies. RealPage expanded when it acquired Lease Rent Options (LRO) in 2017 after undergoing antitrust review by the Justice Department. The Justice Department did not comment on WIRED’s questions about the reported investigation into RealPage or its approval of RealPage’s acquisition of Lease Rent Options in 2017.
Asked about the latest investigation, RealPage referred to a section of its recent, lengthy statement that said, “The Department of Justice reviewed LRO and YieldStar in detail in 2017 and did not object to, much less take issue with, any feature of the products.” RealPage also says its “products are substantially the same today” as they were when the acquisition was approved.
In June, New York Times asked Assistant U.S. Attorney Jonathan Kanter, the Justice Department’s top antitrust official, whether he would consider an AI tool that provides pricing information to be the same as human collusion, a question that referenced reports of the RealPage investigation. Kanter responded, “I often say that if your dog bites someone, you are responsible for your dog biting someone. If your AI sets prices, you are just as responsible.”
The Department of Justice also filed a motion last year statement of interest in the consolidated RealPage class action lawsuit because the case could set a precedent for algorithmic pricing. The filing echoed Kanter’s argument that the pricing method doesn’t matter and that algorithms are simply the latest evolution in information gathering and sharing.
“In-person handshakes have given way to phone calls and faxes and, later, email. Algorithms are the new frontier,” the Justice Department argued in a statement of interest filed in a class action lawsuit against RealPage and landlords. “And given the amount of information an algorithm can access and assimilate, this new frontier poses an even greater anticompetitive threat than the last.”